Economists agree Canada is in a recession, but there's little consensus on why - CBC.ca | Canada News Media
Connect with us

News

Economists agree Canada is in a recession, but there's little consensus on why – CBC.ca

Published

 on


Economists say there is no doubt that Canada is experiencing a recession, but the exact criteria determining one is underway can be fraught with confusion.

Broadly speaking, a recession is a period of business contraction where economic activity declines. But what exactly constitutes a decline, and over what time period, is the subject of much debate.

An often-cited definition is two consecutive quarters of negative gross domestic product (GDP).

Some economists prefer the C.D. Howe Institute’s definition of a “pronounced, persistent and pervasive decline in aggregate economic activity” based on both GDP and employment metrics.

“I’ve always taken the definition of two quarters of negative growth … but this is just another example that we are in uncharted territory,” said Sheila Block, senior economist with the Canadian Centre for Policy Alternatives.

Sheila Block is a senior economist at the Canadian Centre for Policy Alternatives. (Lauren Pelley/CBC News)

“This is just another way that the pandemic is redefining things.”

Her remarks come after Statistics Canada said Friday that the economy posted its steepest decline on record in the second quarter, triggered by the COVID-19 pandemic.

The agency said GDP contracted at an annualized rate of 38.7 per cent for the three-month period, the worst showing since the start of 2009 at the height of the global financial crisis. That follows a first-quarter drop of 8.2 per cent, marking two quarters of GDP declines.

The contraction bolsters opinions that Canada has been in a recession throughout the pandemic.

“This is definitely a recession and a big one,” said Avery Shenfeld, an economist at the Canadian Imperial Bank of Commerce.

Avery Shenfeld is an economist at the Canadian Imperial Bank of Commerce. (CBC)

However, he said it doesn’t require two quarters of negative GDP growth — a method he never uses — to arrive at that conclusion.

The two-quarters method, he said, comes from the National Bureau of Economic Research, a U.S. non-profit organization that analyzes the economy.

Decades ago, Shenfeld said, the bureau established a committee of economists to retroactively determine dates of when recessions started and ended, so researchers would have the same data.

WATCH | Canada’s economy headed for strong, slow recovery after COVID-19:

The Canadian economy is expected to see a strong — but slow — recovery once businesses are able to reopen after the COVID-19 pandemic, the IMF says. 1:56

“They said that a recession is basically a period of material decline in economic activity, which typically includes two consecutive negative quarters, but it doesn’t have to,” he said.

“In other words, if you had a huge drop and it only took place in one quarter, they would still call that a recession, or if you had a drop in one quarter, a small rebound and then another drop, they would put the three quarters together and say over that three quarters, the economy declines so we’re going to call that three quarters of recession.”

Shenfeld said he looks for material weakening in the economy on “the kinds of things that people would normally think of,” such as household income, employment and GDP.

‘V-shaped recovery’

Block has stuck to the two-quarter method, but she said the character of recessions has changed in recent decades.

“For example, with the 2008 and 2009 [recession], we climbed out of it much more quickly than we had out of the early ’80s or the mid-’90s recessions,” she said.

“It was a very V-shaped recovery.”

WATCH | July sees record home sales across Canada despite pandemic:

Canadians set a record in July for the most resale homes sold than in any other month ever. The pandemic is playing a part in an unusually busy summer real estate season. 1:53

The V-shape refers to a sharp but brief period of economic decline that is followed by a quick rebound.

Shifts in the way recessions unfold have pushed economists to seek more accurate ways to characterize them and deal with revisions to economic data that emerge over time, but Block said she doesn’t think there is any debate that we are in a recession now.

It just may end up looking different than we have seen before, she said.

“I think it was Jim Stanford, [a Canadian economist and director of the Centre for Future Work in Australia], who referred to … a Loch Ness monster-shaped recession, and I like that.”

Let’s block ads! (Why?)



Source link

News

Montreal skateboarders rally to protect skatepark

Published

 on

Montreal skateboarders rally to protect skatepark

Source link

Continue Reading

News

Ilia Malinin lands 4 quads – and a backflip – to win his third straight Skate America title

Published

 on

World champion Ilia Malinin won Skate America on Sunday for the third consecutive year, altering his free skate on the fly after an early mistake and punctuating the program with a backflip that had been banned in competition until this season.

The two-time and reigning U.S. champion scored 290.12 points to finish ahead of Kevin Aymoz of France, whose career-best free skate left him with 282.88 points and earned a standing ovation inside Credit Union of Texas Event Center in Allen, Texas.

Kao Miura of Japan, who was second after his short program, finished third with 278.67 points.

“It was a pretty challenging moment for me, just stepping on the ice. I felt way more nervous than usual,” said Malinin, the early favorite for gold at the 2026 Winter Olympics in Italy. “That may have played a part in the whole program.”

Vancouver’s Wesley Chiu placed ninth in the free skate with a score of 140.08 points, he finished ninth overall with a total of 206.94 points.

The ice dance competition was to be decided later Sunday in the final event of the season-opening Grand Prix. Lilah Fear and Lewis Gibson of Britain had the lead over American world champs Madison Chock and Evan Bates after the rhythm dance.

Malinin and Miura were separated by a mere 0.15 points after their short programs, but it was Aymoz who challenged Malinin for the top of the podium. The 27-year-old from France, who struggled mightily at the end of last season, landed a pair of quads in an error-free program to score 190.84 points — the best of all the free skates — and vault into first place.

Nika Egadze of Georgia was next on the ice but fell on his opening quad lutz and stepped out on his quad salchow, and those two mistakes kept him from medal contention. He wound up fourth with 261.71 points.

Miura, the 19-year-old former world junior champion, landed three quads during a program set to “The Umbrellas of Cherbourg,” the 1964 musical romantic drama film. But Miura lost points for an under-rotated triple axel and on a step sequence that led into a quad toe loop-triple toe loop combination midway through his free skate.

Malinin was last to take the ice, performing a program set to “I’m Not a Vampire” by the rock band Falling In Reverse.

He opened with a perfect quad flip and then hit a triple axel, even though Malinin remains the only skater to have landed the quad version of the jump in competition. Then came the mistake, when he doubled a planned quad loop, leaving Malinin to make changes on the fly over the second half of the program in an attempt to make up the lost points.

After putting his hand down on his triple lutz, Malinin landed a quad toe loop-triple toe loop combination before a quad salchow-triple axel in sequence — a pair of huge jumping passes that sent his technical score soaring.

Malinin capped the recovery of his program with a backflip during his choreographed sequence, a move that had been banned until this season because of its inherent danger. It was expected all along but nonetheless sent a roar through the crowd, just as Malinin’s program came to an end and a steady stream of stuffed animals were thrown onto the ice.

“It was really hard for me in the middle of the program to think what I have to do — what I need to do,” Malinin said when asked about the early mistake. “I just went full autopilot through there and I’m glad I made it out.”

___

AP sports:

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

Leclerc wins US Grand Prix and late penalty gives Verstappen 3rd place over Norris in title chase

Published

 on

AUSTIN, Texas (AP) — Charles Leclerc earned Ferrari its first United States Grand Prix victory since 2018 with a clever start and a commanding drive Sunday, and Red Bull’s Max Verstappen strengthened his lead in the F1 season championship by finishing third ahead of McLaren’s Lando Norris.

Verstappen earned the podium only after Norris was given a five-second penalty for leaving the track to pass Verstappen in the final laps.

Verstappen immediately complained about the move, while Norris insisted Verstappen also left the track. Norris’ pass came after the two drivers had battled for the final podium spot and critical championship points over several laps and Verstappen had stubbornly refused to give ground.

The penalty and fourth place finish cost Norris valuable points in the title chase. Verstappen stretched his championship lead over Norris from 54 points to 57 with five grand prix and two sprint races left.

Leclerc earned his third win of the season and Ferrari pulled a 1-2 finish with his teammate Carlos Sainz in second. Kimi Raikkonen had been the last Ferrari winner at the Circuit of the Americas in 2018.

But the bigger battle was raging behind them as Verstappen and Norris fought over every inch of the final dozen laps.

Verstappen has not won a grand prix since June and Norris has steadily chipped away at his lead as the Red Bull car has faded. Yet Verstappen still stretched his lead by five points over the weekend by also winning Saturday’s sprint race.

Norris will leave Austin knowing he squandered a big chance to gain ground. He had even earned pole position for Sunday’s race.

Verstappen started right beside him, and it was their battle into the first turn that saw both cars run wide, leaving room for Leclerc to pounce on the opening.

The Ferrari driver jumped from fourth and straight into the lead.

Norris complained Verstappen forced him off the track at the start to begin a battle that would be fought over the entire race.

___

AP auto racing:

The Canadian Press. All rights reserved.



Source link

Continue Reading

Trending

Exit mobile version